Child Development Inc.’s board of directors elected Thursday to relinquish fiscal and managerial control of its Head Start and Early Head Start programs to an outside agency amid recent funding and administrative issues.

The board voted unanimously to relinquish its oversight of the programs to an interim agency to be named by the Office of Head Start, a division of the U.S. Department of Health and Human Services. The agency will administer Head Start and Early Head Start Programs in the 13 counties formerly governed by Child Development (CDI) and is expected to conduct an audit to determine the cause of a shortfall that delayed paychecks to CDI’s 400-plus employees. CDI officials said Thursday some 200 employees are still owed back wages.

“It is to the best of our knowledge that there has not been any embezzlement that has occurred and there has not been any misuse of federal or state funds,” said Early Head Start director Jana Bays, who is serving as acting director after the departure of executive director Jo Ann Williams, adding CDI is working to resolve the lingering payroll issues.

No details regarding Williams’ departure were given, and Bays declined to identify a fiscal officer she said was no longer with the organization, although CDI’s 2011 annual report listed Lisa Barber as the non-profit’s fiscal officer.

Bays said the decision to relinquish its authority was a measure to ensure continuity with the staff, parents and children involved in the Head Start programs.

“The primary reason for us being willing to work with the Office of Head Start to relinquish our program is so there will be no break in services to our children and families, and that our staff will maintain their jobs, if they choose,” she said. “Continuity of our program and the services to the children and the continuity of staff is going to be our priority as we move through this transition period.”

Bays said the funding issues can be attributed to additional expenses that were incurred from meeting mandates and salary increases for employees who obtained college degrees.

Bays said she was uncertain if the employees will be able to keep their current salary once the interim agency assumes control.

Behavioral health/grant specialist Carol Lee said the problems could be attributed to an accumulation of issues, though it’s too early in the audit process to make any definitive statements.

“We’ve been regularly audited and we’ve not had any problems in the past, so obviously we wouldn’t have gotten one grant after another if we didn’t have clean audits,” Lee said. “So what happened with this past year has been a real shock to us.”

She said no money is missing from the organization and its funds were simply too short to accommodate the additional expenses.

Lee said the Head Start programs will be governed by the interim agency only until CDI can recompete for federal funding later this year.

“It’s just a temporary grantee,” she said. “There’s always been a lot of emphasis on local control, so this is a temporary situation.”

Bays said the services provided through the Head Start programs will continue, regardless of who assumes control upon recompetition.

Despite rumors, Lee dismissed allegations that CDI employees’ jobs were threatened if they contacted the press with information regarding the pay delay.

“We have not threatened anybody,” she said.

CDI directors met with staffers at the Russellville office Thursday following the board’s decision to relinquish local control of the Head Start programs. Employees declined to speak with reporters Thursday.

“I think they’re doing the best they can for the children and their families,” said a parent at the Russellville office who did not provide her name.

Due to the funding issues, CDI offices and Head Start programs were closed Tuesday through all 13 counties the organization governs. CDI enrolled 2,152 children in 13 counties last year.

CDI will continue to operate state-funded pre-kindergarten and developmental daycare programs, as well as fulfill any grants the organization currently has, Lee said.